Prentice budget cuts will deepen recession

Reckless PC spending cuts will make oil downturn worse for Albertans

Edmonton – The nine per cent budget cuts proposed by finance minister Robin Campbell and Premier Jim Prentice will plunge Alberta into a downward economic spiral, harm Albertans who rely on public services, and further threaten to push Alberta toward recession.

On Wednesday, February 11, the finance minister joined Premier Jim Prentice in a press conference updating Albertans on their plan to tackle government deficits caused by low oil prices and an irresponsible tax system. In the conference, the premier cited the languishing price of oil as a pretext for austerity measures and spending cuts.

“Jim Prentice has an opportunity here to show some leadership and political courage. Today’s press conference is an indication that he isn’t going to take that opportunity. This is terrible news for all Albertans,” Alberta Federation of Labour president Gil McGowan said. “The premier knows that we’re facing a possible recessionary period – and every credible economist will tell you that slashing spending at this time will only deepen that recession.”

Despite the Premier saying he has heard that Albertans want a measured and reasoned response to the current fiscal reality, the PC government announced up to a nine per cent cut in government spending across the board. This will mean billions of dollars less each year for the front-line services on which Albertans rely, without addressing the underlying problem that the province’s budgets are too dependent on fluctuating resource revenues.

“When you cut spending this drastically, you put people out of work. When you put more people out of work, they stop spending. And when that many people stop spending, the economy grinds to a halt,” McGowan said. “Unless Premier Prentice can step up and provide leadership on royalties and taxes, Alberta could be heading for some very dark times.”